61% of Small Businesses Expect Demand for Their Products or Services to Increase in 2018

In one of the data points of the PNC (NYSE:PNC) Economic Outlook, 61% expect demand for their company’s products or services to increase in the next six months. This was up from the 51 percent number recorded in the fall of 2017.

Spring 2018 PNC Economic Outlook Survey

Overall, the sentiment of the PNC Economic Outlook was reported to running historic highs in optimism since PNC has been conducting the survey for the past 15 years. The results of the latest survey revealed half of the respondents are optimistic about the national economy in spring 2018. This is a 21 percent increase compared to the fall survey when it was at 29 percent.

Gus Faucher, chief economist of The PNC Financial Services Group, Inc., addressed the current economic environment in the press release, he said, “The overall findings from our biannual survey, which began in 2003, confirm that the U.S. economic expansion, now almost nine years old and the second-longest in U.S. history, will continue throughout 2018.”

The PNC Economic Outlook survey was conducted by the Artemis Strategy Group by telephone from January 12 to March 6, 2018. The participants were 500 small and mid-sized businesses within the United State with annual revenues of $100,000 to $250 million.

Key Findings

The fact that 51 percent are reporting a good balance between the volume of business and the capacity to handle the volume is a good indicator of the current economic conditions for small businesses. This particular data point also plays into the hiring boom, as 64 percent stated they would be adding more employees to meet the demand they are experiencing.

Regarding the high rate of optimism, the PNC Survey reports 85 percent of all respondents have positive emotions for what is to come in the next six months. Hope and enthusiasm were expressed by 39 and 37 percent of the respondents respectively, while nine percent said joy. Those that felt fear, despair, or anger are in single digits.

Other findings business leaders revealed for the next six months include: 49 percent see higher wages; 40 percent said it is hard to find qualified workers, 69 percent are anticipating increased sales; and 64 percent expect increased profits.

As to the tax reform passed by the Trump administration, the verdict is still out according to the survey. The majority or 61 percent said they weren’t planning to make any changes to their business in 2018 in response to the tax bill. This was in great part attributed to their unfamiliarity with the details of the Tax Cuts and Job Act of 2017. Only 27 percent said they understood the specific effects of the Act on their business. However, 43 percent said it will have a positive impact, compared to five percent who said negative, and 17 stating the impact would be neutral.